UnitedHealthcare to pass drug rebates on to some customers

The nation’s biggest health insurer will pass drugmaker rebates along to some customers starting next year, giving a potential break to those taking expensive prescriptions.

UnitedHealthcare said Tuesday it will let people covered by certain employer-sponsored health plans collect rebates when they fill prescriptions or at the point of sale. Those rebates could amount to a few bucks or several hundred dollars, depending on the drug.

Drugmakers frequently give rebates for prescription drugs, but those discounts rarely flow directly to the people filling prescriptions. How these rebates are used has become a growing source of debate in recent years as the cost of some treatments has soared.

The Pharmacy Benefit Management Institute says insurers and employers most often use the money to reduce overall plan costs.

The rebates that UnitedHealthcare plans to pass along could lower customer expenses like deductibles or co-insurance payments. Those costs in general have climbed steadily in recent years as employers shift more of the coverage expense to people who use the prescriptions.

UnitedHealthcare’s announcement marks a “major win” for patients, according to Adam Fein, who follows the industry as CEO of Drug Channels Institute. He noted that most rebates come from patients using brand-name drugs to treat chronic conditions, but that money frequently goes toward lowering costs for everyone, including healthier customers.

“A small number of people are generating most of the rebate dollars, and they are not seeing the direct benefit,” he said.

UnitedHealthcare’s plan is a “prime example of the type of movement toward transparency and lower drug prices for millions of patients that the Trump Administration is championing,” U.S. Health and Human Services Secretary Alex Azar said in a statement Tuesday.

But the industry lobby America’s Health Insurance Plans said these point-of-sale rebates offer limited help in reducing the overall drug prices that make everyone’s cost of coverage rise.

“The bottom line is the original list price of a drug — which is solely determined by the drug manufacturer — drives the entire pricing process,” spokeswoman Cathryn Donaldson said in an email. “And if the original list price is high, the final cost that a patient pays will be high.”

Donaldson said her association was speaking about these rebates in general and not about UnitedHealthcare, which it does not represent.

UnitedHealthcare’s rebate plan will apply to about 7 million people who have fully insured coverage through an employer. That’s a relatively small slice of business for an insurer that covers more than 49 million people.

The plan does not apply to the insurer’s individual coverage or to insurance offered through most large employers.

UnitedHealthcare is the insurance arm of Minnetonka, Minnesota-based UnitedHealth Group Inc.